Oil bounces as China demand hopes offset recession fears

“There is no doubt that demand is being adversely influenced,” said Naeem Aslam, analyst at brokerage Avatrade

“However, not everything is so negative as China has vowed to fight all pessimism about its economy, and it will do what it takes to boost economic growth

Brent crude last gained 54 cents, or 0.54%, to $79.58 a barrel by, while U.S. West Texas Intermediate crude crude rose 42 cents, or 0.4%, to $74.71

Oil surged towards its record high of $147 a barrel earlier in the year after Russia invaded Ukraine. It has since unwound most of this year’s gains as supply concerns were edged out by recession fears, which remain a drag on prices

The U.S. Federal Reserve and European Central Bank raised interest rates last week and promised more. The Bank of Japan, meanwhile, could shift its ultra-dovish stance when it meets on Monday and Tuesday

“The prospect of further rate rises will hit economic growth in the new year and in doing so curb demand for oil,” said Stephen Brennock of oil broker PVM

Oil was supported by the U.S. Energy Department saying on Friday that it will begin repurchasing crude for the Strategic Petroleum Reserve – the first purchases since releasing a record 180 million barrels from the reserve this year